το μεγάλο κόλπο

Here’s what you are not going to read in the newspapers. This is not a sovereign debt crisis. That’s baloney. Government debt has always been guaranteed. Until now. The decision NOT to guarantee government debt was a political decision, not an economic one. Governments’ always underwrite their debt because governments represent the collective interests of the people. And with sovereignty comes certain perks, like printing one’s own money if need-be. So, if a government like Italy gets into a jam and needs to either weaken its currency or lower interest rates; it can do-so by either printing more money or buying its own bonds to keep rates low. That means, there’s always some risk of inflation, but never any risk of default. And, that’s what matters, because investors don’t buy gov. debt to get rich; they buy it because it’s safe.

The scamsters at the ECB refuse to guarantee government debt because it’s not in their interests. What they want is a bigger share of the economy to go to big finance and corporate elites. And the easiest way to achieve that is by allowing bond yields to rise enough so the politicians can be blackmailed into doing whatever the banksters want. And we know what they want. They want more for themselves and less for everyone else.

This is Draghi’s game. He’s giving away the farm to his bankster friends and giving working people the finger.

The $600 Billion Ripoff

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ολοταχώς

«Ωστόσο η πολιτική απάντηση (στην κρίση) είναι αρκετά αναιμική και καθυστερημένη για να μην πω κάτι περισσότερο» αναφέρει χαρακτηριστικά ο Στίγκλιτζ. Γνωστός για την κριτική του στα προγράμματα εξοντωτικής λιτότητας ο αμερικανός οικονομολόγος εκτιμά ότι το πιο πιθανό σενάριο για το 2012 «θα είναι η αναπαραγωγή του ίδιου σχεδίου: λιτότητα, αποδυνάμωση της πραγματικής οικονομίας, περισσότερη ανεργία και διαιώνιση των δημοσιονομικών προβλημάτων». Ο ίδιος επισημαίνει το παράδοξο της πολιτικής που ακολουθείται από τους ευρωπαίους ηγέτες οι οποίοι διακηρύσσουν τη δέσμευσή τους για στήριξη του κοινού νομίσματος αλλά ταυτόχρονα το υποσκάπτουν εν γνώσει τους καθώς ομολογούν ότι τα εφαρμοζόμενα μέτρα οδηγούν σε ύφεση. «Η μέρα της Κρίσης, τότε που το ευρώ θα καταρρεύσει ή η Ευρώπη θα λάβει τα ριζοσπαστικά μέτρα που απαιτούνται για να λειτουργήσει το κοινό νόμισμα, θα έρθει πιθανότατα το 2012. Όμως όπως όλα δείχνουν οι ηγέτες θα κάνουν ό,τι περνά από το χέρι τους για να μεταθέσουν αυτή τη μέρα. Η Ευρώπη όπως και ο υπόλοιπος κόσμος θα υποφέρει».

Στίγκλιτζ: Μακάρι να διαψευστώ αλλά το ευρώ οδεύει σε κατάρρευση

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my friend Kostas gets attention from big media

27 Dec 2011 02:11 PM

A Day After Boxing Day Gift

listen

χρόνια πολλά σε όλους

από το νέο μέλος στη συμμορία μου

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et in arcadia ego

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the new revolt

Photo Booth

Twelve Months of Protestby Elissa Curtis

From January in Tunisia to December in Russia, a dozen photographs from a year of dissent.

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κάτω από έναν παράξενο ουρανό

Αθήνα, Δεκέμβριος 2011
...

Μας κλέβουν τις ζωές

"They Are Stealing Our Lives"

Greece in Chaos

by NOËLLE BURGI

“Who knows what tomorrow will bring?” people ask in Athens, Salonika and right across Greece. There’s a sense of collective imprisonment, individual uncertainty and impending catastrophe. Yet Greece has had a turbulent history, and the Greeks have always seen themselves as a gifted people, sturdy and accustomed to adversity. “There have always been difficult times, and we always made it through. But now, all hope has been taken from us,” said a small business owner.

While the austerity measures are piling up, an avalanche of laws, decrees and edicts is sweeping aside the social, economic and administrative frameworks. Yesterday’s reality is crumbling. As for tomorrow — who knows?

Greek citizens are subject to a Kafkaesque bureaucracy, with its incomprehensible, fluctuating regulations. Addressing colleagues, a civic employee in the Cyclades said: “People want to conform to the law, but we don’t know what to tell them, [the authorities] haven’t given us any details.” A man had to pay € 200 and present 13 papers and proofs of identity to renew his driving license. Salary cuts among public employees have disrupted the public sector. “When you call the police to alert them to a situation, they reply, ‘it’s your problem, you deal with it’,” said a retired engineer officer from the merchant navy. Tensions are rising. Reports show a big increase in domestic violence, theft and murder (1).

Salaries are falling (by 35-40% in some sectors) while new taxes are invented, some backdated to the beginning of the calendar year. Net incomes have fallen drastically, in many cases by 50% or more. Since the summer, a solidarity tax (1-2% of annual income) and an energy tax (calculated on the consumption of petrol and natural gas) have been levied. Further novelties include the lowering of the tax threshold from € 5,000 to € 2,000, and a property tax of € 0.5 to € 20 per square metre levied as part of electricity bills, payable in two or three instalments (failure to pay results in power cuts and penalties).

ΜΟRE

read

Europe’s Deadly Transition From Social Democracy to Oligarchy

by MICHAEL HUDSON

The easiest way to understand Europe’s financial crisis is to look at the solutions being proposed to resolve it. They are a banker’s dream, a grab bag of giveaways that few voters would be likely to approve in a democratic referendum. Bank strategists learned not to risk submitting their plans to democratic vote after Icelanders twice refused in 2010-11 to approve their government’s capitulation to pay Britain and the Netherlands for losses run up by badly regulated Icelandic banks operating abroad. Lacking such a referendum, mass demonstrations were the only way for Greek voters to register their opposition to the €50 billion in privatization sell-offs demanded by the European Central Bank (ECB) in autumn 2011.

The problem is that Greece lacks the ready money to redeem its debts and pay the interest charges. The ECB is demanding that it sell off public assets – land, water and sewer systems, ports and other assets in the public domain, and also cut back pensions and other payments to its population. The bottom 99% understandably are angry to be informed that the wealthiest layer of the population is largely responsible for the budget shortfall by stashing away a reported €45 billion of funds stashed away in Swiss banks alone. The idea of normal wage-earners being obliged to forfeit their pensions to pay for tax evaders – and for the general un-taxing of wealth since the regime of the colonels – makes most people understandably angry. For the ECB, EU and IMF “troika” to say that whatever the wealthy take, steal or evade paying must be made up by the population at large is not a politically neutral position. It comes down hard on the side of wealth that has been unfairly taken.

Europe’s Deadly Transition From Social Democracy to Oligarchy

αυτό το γαλάζιο είναι για όλους

...

δόση φθινοπώρου

...

η τέχνη σώζει ζωές

Μια από τις καλύτερες εκθέσεις που έχω δει ποτέ

Turner, Monet, Twombly

ιστορίες λιτότητας

Eurozone Crisis Enters New Phase

Austerity for Europe

by MARK WEISBROT

The house is on fire and the owners are arguing about what kind of safety regulations should be implemented in the future so as to prevent these types of fires. That is what appears to be going on in the eurozone right now, as European leaders try to reach agreement on a series of measures that would impose “fiscal discipline” on member states in the future.

Of course, these would-be fire marshals haven’t even identified the correct safety regulations, since it was not over-borrowing by governments that caused this crisis, but rather over-borrowing, bubble-driven growth, and other excesses of the private sector. But the most urgent problem right now is the fire itself – the eurozone is already in recession, according to the OECD, and their financial crisis is already slowing the world economy. This includes Brazil, which today announcedthat GDP growth for the third quarter has been zero.

However, we have entered a new phase of the crisis — although it has been barely noticed by the media — which is mainly focused on the proposed fire safety regulations. On Friday, the head of the European Central Bank (ECB), Mario Draghi, hinted for the first time that the ECB could play a bigger role in buying Italian and Spanish bonds. According to press reports, he justified this on the grounds that the ECB had a responsibility to maintain price stability “in either direction.”

Austerity for Europe

ακόμα μία κρίση

The economist known as "Dr. Doom" for his 2008 recession prediction says the world may be headed for another financial crisis.

New York University professor Nouriel Roubini said Wednesday that Europe's debt troubles are so profound that the continent is falling into a "recession that will get worse and worse."

And a deep recession likely will lead to another financial panic that could spread around the world — an outcome that will be " very painful," he said.

Roubini spoke at a conference called, "U.S. Economy at Risk: What Can Be Done?," sponsored by the New American Foundation, a research group.

He is just back from Europe, where he says the debt crisis is reaching its climax. But he is not looking for a happy ending.

Government austerity programs, higher unemployment and reduced business and consumer confidence will combine to cut growth for at least two years, he says.

On Friday, European leaders will meet at a Brussels summit to establish a long-term commitment to defuse their debt bomb, restore fiscal credibility and save the euro as the currency of 17 European nations.

Roubini predicts Europe's leaders "will reach something of a compromise, but it won't be sufficient" to solve the problem of too much government debt.

They will agree that "fiscal austerity and reforms will be necessary," but those changes will only depress growth, leading to lower tax revenues and a deepening debt crisis. Eventually, investors in some European bonds "will see they are insolvent," he said.

"With Italy too big to fail, too big to save, and now at the point of no return, the endgame for the eurozone has begun," Roubini said in a recent written assessment.

He says a disorderly eurozone break-up would trigger a financial system shock as serious as the collapse of Lehman Brothers in 2008, if not worse.

Besides teaching, Roubini is chairman of Roubini Global Economics and co-author of the book "Crisis Economics."

διαταγή ...

η επιθυμία σας ...

στους δρόμους της Στοκχόλμης

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Killing the Euro

By PAUL KRUGMAN

Can the euro be saved? Not long ago we were told that the worst possible outcome was a Greek default. Now a much wider disaster seems all too likely.

True, market pressure lifted a bit on Wednesday after central banks made a splashy announcement about expanded credit lines (which will, in fact, make hardly any real difference). But even optimists now see Europe as headed for recession, while pessimists warn that the euro may become the epicenter of another global financial crisis.

How did things go so wrong? The answer you hear all the time is that the euro crisis was caused by fiscal irresponsibility. Turn on your TV and you’re very likely to find some pundit declaring that if America doesn’t slash spending we’ll end up like Greece. Greeeeeece!

But the truth is nearly the opposite. Although Europe’s leaders continue to insist that the problem is too much spending in debtor nations, the real problem is too little spending in Europe as a whole. And their efforts to fix matters by demanding ever harsher austerity have played a major role in making the situation worse.

The story so far: In the years leading up to the 2008 crisis, Europe, like America, had a runaway banking system and a rapid buildup of debt. In Europe’s case, however, much of the lending was across borders, as funds from Germany flowed into southern Europe. This lending was perceived as low risk. Hey, the recipients were all on the euro, so what could go wrong?

For the most part, by the way, this lending went to the private sector, not to governments. Only Greece ran large budget deficits during the good years; Spain actually had a surplus on the eve of the crisis.

Then the bubble burst. Private spending in the debtor nations fell sharply. And the question European leaders should have been asking was how to keep those spending cuts from causing a Europe-wide downturn.

Instead, however, they responded to the inevitable, recession-driven rise in deficits by demanding that all governments — not just those of the debtor nations — slash spending and raise taxes. Warnings that this would deepen the slump were waved away. “The idea that austerity measures could trigger stagnation is incorrect,” declared Jean-Claude Trichet, then the president of the European Central Bank. Why? Because “confidence-inspiring policies will foster and not hamper economic recovery.”

But the confidence fairy was a no-show.

Krugman: Killing the Euro

read,see

Send in the Clouds

TRAVEL

|

By ANTHONY DOERR

| NOVEMBER 18, 2011, 8:08 AM

Photographs by Vava RibeiroCanopy opener The Mashpi nature reserve, rich with birds and bugs, sits on nearly 3,000 acres in the Western Andes.

Like pretty much everyone in Ecuador, Roque Sevilla drives fast. I hurtle with him from the capital of Quito down two and a half hours of gut-stirring switchbacks, losing elevation with every turn. The sugar-cane and cattle farmsteads tumbling past on either side dwindle steadily, while the surrounding forests gain in age and power.

Sevilla talks the whole way. Slender, mustached and hugely energetic, he recites the names of tree species, describes different hummingbirds and tells stories about the foundations of Ecuador’s conservation movement. “I have been in Europe, Africa, Asia and North America,” he says, “but Ecuador — and I don’t say this only because it is my home — is truly special.”

Sevilla should know. He is a former mayor of Quito and a member of the National Council of the World Wildlife Fund. He also runs the country’s largest tourism company

At a fork in the road, signs present us with a typically Ecuadorean choice: Paraiso (Paradise) on the left and La Delicia (the Delight) on the right. Sevilla goes right. The air thickens; the road turns to clay and gets wet. Unbroken walls of trees scroll past. Finally we come over a last rib of the cordillera and drop into the white.

White, white, white — at first that’s all I can see, not the jungly hills I’ve imagined, or the bright flashes of equatorial birds — nothing more than streaming curtains of cloud creeping up valleys, folding over ridges, veiling the world.

Only in shreds and glimpses do I begin to see trees. They pass us in ghostly walls, so close together and so diverse in species that the eye hardly knows how to parse them into individuals. Dozens of plants hang from, cling to or wrap every one of them — vines, mosses, ferns, bromeliads, orchids as tiny as my fingernail and orchids as big as my forearm.

This is Mashpi Rainforest Biodiversity Reserve, a recently formed private concession on the western slopes of the Andes, a last piece of Ecuadorean cloud forest at the southern end of what ecologists call the Chocó-Darién biogeographic region. In May, the Municipality of Quito declared 45,500 acres of this forest a “natural protected area”; that reserve envelops the heart of Mashpi, 2,891 acres that belong to Roque Sevilla.

ο απόλυτος μ.......

watch

THE LAST OBSESSION from Luca Finotti on Vimeo.

χαιρετίσματα από τη Στοκχόλμη

HAPPY BIRTHDAY

κι η Γη γυρίζει

Earth | Time Lapse View from Space, Fly Over | NASA, ISS from Michael König on Vimeo.

από το doctv

• 

  Α' ΠΡΟΣΩΠΟ | 16.11.2011

  Στο σύμπαν του Γκέμπελς

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δες

bye bye eurozone

Let The Economist have the last word. This is from an article by Ryan Avent in the current issue titled “Finito?”:

“I have been examining and re-examining the situation, trying to find the potential happy ending. It isn’t there. The euro zone is in a death spiral. Markets are abandoning the periphery, including Italy, which is the world’s eighth largest economy and third largest bond market. This is triggering margin calls and leading banks to pull credit from the European market. This, in turn, is damaging the European economy, which is already being squeezed by the austerity programmes adopted in every large euro-zone economy. A weakening economy will damage revenues, undermining efforts at fiscal consolidation, further driving away investors and potentially triggering more austerity. The cycle will continue until something breaks. Eventually, one economy or another will face a true bank run and severe capital flight and will be forced to adopt capital controls. At that point, it will effectively be out of the euro area. What happens next isn’t clear, but it’s unlikely to be pretty.” (“Finito?, The Economist)

ω οι ευτυχισμένες μέρες

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Bunga Banka

November 10, 2011

Legends of the Fail

By PAUL KRUGMAN

This is the way the euro ends — not with a bang but with bunga bunga. Not long ago, European leaders were insisting that Greece could and should stay on the euro while paying its debts in full. Now, with Italy falling off a cliff, it’s hard to see how the euro can survive at all.

But what’s the meaning of the eurodebacle? As always happens when disaster strikes, there’s a rush by ideologues to claim that the disaster vindicates their views. So it’s time to start debunking.

First things first: The attempt to create a common European currency was one of those ideas that cut across the usual ideological lines. It was cheered on by American right-wingers, who saw it as the next best thing to a revived gold standard, and by Britain’s left, which saw it as a big step toward a social-democratic Europe. But it was opposed by British conservatives, who also saw it as a step toward a social-democratic Europe. And it was questioned by American liberals, who worried — rightly, I’d say (but then I would, wouldn’t I?) — about what would happen if countries couldn’t use monetary and fiscal policy to fight recessions.

So now that the euro project is on the rocks, what lessons should we draw?

I’ve been hearing two claims, both false: that Europe’s woes reflect the failure of welfare states in general, and that Europe’s crisis makes the case for immediate fiscal austerity in the United States.

Krugman: Eurodebacle

una fatsa una crisi

The Crisis Worsens

Economic Mismanagement in Europe

by MARK WEISBROT

Some of us have been warning for months about the crisis scenario that is accelerating today in Europe. In particular I have noted that the European authorities were pushing Italy down a dangerous path, similarly to what they did to Greece. The formula is deadly: force budget tightening on an economy that is already shrinking or on the edge of recession. This shrinks the economy further, causing government revenue to fall and making further tightening necessary to meet the target budget deficit. The government’s borrowing costs rise because markets see where this is going. This makes it even more difficult to meet the targets, and the whole mess can spiral out of control.

Today financial markets reacted violently to this process in Italy, with yields on both 10-year and 2-year Italian government bonds soaring past 7 percent. Let’s do the math.

MORE

από το DOCTV

• 

  Α' ΠΡΟΣΩΠΟ | 10.11.2011

  Όχι άλλο Ευρώπη

Mercozy suck

Wall Street Journal Lays It Down: "Merkel And Sarkozy Have Lost Credibility"

The United States fought a bloody civil war in the nineteenth century to stop states seceding from the union. Yet the German and French leaders have decided the euro zone will be a voluntary union, not because of an attachment to the principle of national self-determination but to protect the principle that euro-zone countries should not become liable for each other's debts. The significance of Ms. Merkel and Mr. Sarkozy's Cannes declaration is immense. At a stroke, they have introduced foreign-exchange risk into a sovereign-debt market still grappling with the realization that euro-zone government bonds contain unexpected credit risk. Worse, throughout the crisis, the two leaders said they will do whatever it takes to save the euro. Yet the assurances they've given haven't been worth the paper they were written on: First, there were to be no sovereign defaults; then the first Greek haircut was a "unique situation;" the second Greek haircut followed 12 weeks later; now euro-zone exits are possible. No wonder the markets won't lend and China won't invest in Europe's bailout funds. Nothing these leaders say any longer carries any credibility.

δες

PHOTO BOOTH

From punks to models.

winter is coming

No one knows why they do it. Yet each fall, thousands of starlings dance in the twilight above Gretna, Scotland. The birds gather in magical shape-shifting flocks called murmurations, having migrated in the millions from Russia and Scandinavia to escape winter’s bite. Scientists aren’t sure how they do it, either. Even complex algorithmic models haven’t yet explained the starlings’ acrobatics, which rely on the tiny bird’s quicksilver reaction time of under 100 milliseconds to avoid aerial collisions—and predators—in the giant flock. Despite their show of force in the dusky sky, starlings have declined significantly in the UK in recent years, perhaps because of a drop in nesting sites. The birds still roost in several of Britain’s rural pastures, however, settling down to sleep (and chatter) after the evening’s ballet.

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το 4ο Ράιχ αντιμετωπίζει πρόβλημα

Not With A Bang, But A 28% Annualized Decline: Charting The End Of The German Manufacturing Miracle

Slowly, but surely, the global economic growth dynamo is growing ever dimmer and dimmer. Two days ago we reported that that relentless driver of global growth - exports - finally succumbed to reality, as slowly but surely the paradigm of everyone exporting to someone else with magically nobody importing, logically collapsed. This is now followed by German manufacturing, that traditional and only source of strength in Europe, which half an hour ago was reported to drop 4.3%, compared to an expectation of a 0.1% gain. In other words, as the chart below shows German factory orders have just suffered their worst three, post-Reunification months outside of the late crash itself, falling at a 28% annualized rate, to take the total back to where it first stood over five years ago. Reaction is swift: Italian and Spanish bonds immediately drop, with the yield returning to 6.23% and 5.52%, forcing the ECB's monetization actions to have to fight not only "speculators" but also reality.

ξυπνήσανε στην Ιταλία

δεν έχω ακόμα αποφασίσει

Αν ο στόχος του είναι να σώσει την Ελλάδα έχει αποτύχει παταγωδώς. Αντίθετα όλες οι αποφάσεις, όλες οι κινήσεις που έχει κάνει μέχρι στιγμής είχαν σαν αποτέλεσμα να βυθίσουν ακόμα περισσότερο στην κρίση την έρημη ετούτη χώρα.

Αν ο στόχος του είναι να διαλύσει την ΕΕ τα καταφέρνει περίφημα. Και ταυτόχρονα εξηγεί όλες τις μέχρι τώρα αποφάσεις του και κινήσεις του. Είναι ο άνθρωπος που έφερε το ΔΝΤ στην Ευρώπη και που διαπραγματευόταν μαζί του πριν καν πάρει την εξουσία, ενώ μας γέμιζε με φούμαρα για λεφτά που υπάρχουν. Είναι ο άνθρωπος που κάνει τα πάντα για να συντηρήσει και να επιτείνει την αβεβαιότητα βυθίζοντας τα χρηματιστήρια σε ολόκληρο τον κόσμο.

Δεν μπορώ να καταλήξω αν είναι επικίνδυνα βλάκας ή επικίνδυνα ικανός.

a good idea

November 01, 2011

An Ideal Target

Occupy the European Central Bank

by DEAN BAKER

In the last month, people from around the country and around the world have picked up on the Occupy Wall Street theme of retaking the country from the wealthy. Insofar as this sentiment gathers force in Europe, there is probably no place better for people to plant themselves than on the steps of the European Central Bank (ECB).

More than any other institution the ECB is responsible for the economic wreckage that has overtaken the European economy. In the years when housing bubbles were building across the much of the eurozone and the United States, the ECB looked the other way. Its position at the time was that these bubbles and the huge imbalances they created were not its concern. Its concern was keeping the inflation rate at 2.0 percent.

This single-minded obsession with the inflation rate at a time when the economies of the eurozone and the world were on the edge of disaster is akin to Kodak insisting that its business line was photographic film at a time when digital photography was exploding. Competent business people adjust their business plans when the world changes. In the same vein, competent central bankers reorder their priorities when the economic situation requires changes.

But the ECB ignored the housing bubbles and the economy came crashing down around them. This may have been due to incompetence or it may have something to do with the fact that many of their friends in the banking industry were making lots of money financing the bubbles. Either way the consequences for the European people are the same.

MORE

that's the way

the abyss

October 31, 2011

Draghi at the Central Bank

Is Goldman Sachs Poised to Takeover Europe?

by MIKE WHITNEY

Goldman Sachs is about to take over Europe, but you wouldn’t know it by reading the papers.

On Tuesday, G-Sax alum, Mario Draghi, will take the helm at the European Central Bank replacing retiring ECB president Jean-Claude Trichet. The appointment has slipped by the media virtually unnoticed even though the ECB is the most powerful institution in the EU and is likely to play a critical role in solving the debt crisis.

Draghi was formally a Managing Director at Goldman. He also served as an advisor to the Bank of Italy in 1990, chairman of the Italian Committee for Privatisations, and was an Executive Director of The World Bank from 1984 to 1990. His bio. affirms his globalist pedigree which makes him the perfect candidate to replace the curmudgeonly Trichet who failed to comply with all of Big Finance’s demands. That’s not likely to be the case with Draghi.

The new ECB chief faces the difficult task of trying to pacify Germany while implementing policies that are opposed by the German political class as well as the German people. It won’t be easy, even for a skilled diplomat like Draghi. But Draghi will move forward with his bank-centric agenda, because it may be the last chance to keep the 17-member monetary union from disintegrating.

MORE

the art of falling apart

Europe’s Economy is Falling Apart

Yves here. Note the comment at the end, that Sarkozy’s sales pitch to China on the levered up EFSF did not go so well. If the Chinese don’t relent, this greatly reduces of this scheme working, even in the short term. And further note that the flagging European growth is the result of the austerity hairshirt being imposed on highly indebted economies. Ambrose Evans-Pritchard has a pointed article on the consequences of the beggar-thy-neighbor German stance.

By Delusional Economics, who is horrified at the state of economic commentary in Australia and is determined to cleanse the daily flow of vested interests propaganda to produce a balanced counterpoint. Cross posted from MacroBusiness

Angela Merkel has been warning for quite some time that Europe’s economic woes will take up to a decade to fix and that it is time for Europe to rethink its economic strategy after years of living “beyond its means”. It seems fairly obvious from those statements that the rest of the world is going to have to get use to Europe moving into a slow growth phase while it attempts to adjust away from what it considers to be unsustainable debt.

In an attempt support the transition while keeping Europe together the European leaders have put together 3 part package to save Greece, re-capitalise the banks and provide a stability mechanism for countries that run into trouble. The problem is that once you understand the technicalities behind what they have come up with you come to realise that real economic growth is the only thing that actually matters. The latest news out of Europe for many of the 17 member nations is not good at all in that regard.

Read the Rest...

brilliant

It's 'How' You Lose by Doc Tv on Mixcloud

fiasco 2.0

MIKE WHITNEY
The Never-Ending Eurofiasco

Imagine if the local fire chief, in the spirit of conservation, decided he’d use no more than 1,000 gallons of water to put out any given house fire. Do you think the citizens would support that policy if their town was burned to the ground? And, yet, this is the same approach that eurozone leaders are using to address the debt crisis. The central bank (ECB) has virtually limitless resources (Think: printing press) to defend the debt of the individual states and to act as lender of last resort, but the eurocrats won’t hear of it. They refuse to use the ECB as every other central bank in the world is used. They’d rather reinvent the wheel by creating a funky, improvised emergency fund (European Financial Stabilization Facility or EFSF) that’s massively leveraged and which only provides a 20 percent “first-loss” guarantee on sovereign bonds. So, for example, if Italy goes belly-up in the next year or so and can’t repay its debts, then Mr. bondholder gets a whopping 20 cents on the dollar. Such a deal!

Can you see how ridiculous this is?

see

PHOTO BOOTH

The Prague Spring, on view in Moscow.

Read more http://www.newyorker.com/#ixzz1cG4pONtx

δες και άκου

χωρίς λόγια

Οι σκέψεις ενός Ιρλανδού

Every now and then a terrible thought enters my mind. It runs like this: what if the theatre of the Eurocrisis is really and truly a political power-game being cynically played by politicians from the core while the periphery burns?

Yes, of course, we can engage in polemic and say that such is the case. But in doing so we are trying to stoke emotion and generally allowing our rhetorical flourish to carry the argument. At least, that is what I thought. I had heard this rhetoric; I had engaged in it to some extent myself; but I had never really believed it. Only once or twice, in my nightmares, I had thought that, maybe, just maybe, it might have some truth.

And then the Financial Times published this ‘strictly confidential’ document leaked to them from within the Eurostructure. That is when my nightmare started becoming increasingly real.

[...]

Hence, my nightmare becomes ever more real. What this report suggests is that the Eurocrats know well what they are doing. They are imposing destructive austerity measures – and, let us be frank, pointless asset-stripping drives – on the periphery knowing full well what effect these are going to have.

So, why are they doing this? Well, in light of current evidence we should raise the unpleasant question: is there not the chance that this is really a cynical power-grab? The elites in the core countries have found their political status boosted immeasurably by the present crisis. They will moan that this crisis is awful, of course, but secretly they must know that it is upping their political profile immeasurably and putting them in important decision-making positions.

And so, what if we are moving into a situation where the Eurocrats establish an iron-grip on the periphery through financing arrangements that essentially allow them full control over the imposition of highly destructive economic policies?

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By Marshall Auerback, a portfolio strategist and hedge fund manager, and Rob Parenteau, CFA, sole proprietor of MacroStrategy Edge and a research associate of The Levy Economics Institute

Historically, Greeks have been very good at constructing myths. The rest of the world? Not so great, if the current burst of commentary on the country is anything to go by. Reading the press, one gets the impression of a bunch of lazy Mediterranean scroungers, enjoying one of the highest standards of living in Europe while making the frugal Germans pick up the tab. This is a nonsensical propaganda. As if Greece is the only country ever to cook its books in the European Union! Rather, the heart of the problem is in the antiquated revenue system that supports that state, which results in a budget shortfall consistently about 10% of GDP. The top 20% of the income distribution in Greece pay virtually no taxes at all, the product of a corrupt bargain reached during the days of the junta between the military and Greece’s wealthiest plutocrats. No wonder there is a fiscal crisis!

So it’s not a problem of Greek profligates, or an overly generous welfare state, both of which suggest that the standard IMF style remedies being proposed here are bound to fail, as they are doing right now. In fact, given the non-stop austerity being imposed on Athens (which simply has the effect of deflating the economy further and thereby reducing the ability of the Greeks to hit the fiscal targets imposed on them), the Greeks really are getting close to the point where they may well default and shift the problem back to those imposing the austerity.

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the bitter truth

October 23, 2011

The Hole in Europe’s Bucket

By PAUL KRUGMAN

If it weren’t so tragic, the current European crisis would be funny, in a gallows-humor sort of way. For as one rescue plan after another falls flat, Europe’s Very Serious People — who are, if such a thing is possible, even more pompous and self-regarding than their American counterparts — just keep looking more and more ridiculous.

[...]

What does this have to do with Europe? Well, at this point, Greece, where the crisis began, is no more than a grim sideshow. The clear and present danger comes instead from a sort of bank run on Italy, the euro area’s third-largest economy. Investors, fearing a possible default, are demanding high interest rates on Italian debt. And these high interest rates, by raising the burden of debt service, make default more likely.

It’s a vicious circle, with fears of default threatening to become a self-fulfilling prophecy. To save the euro, this threat must be contained. But how? The answer has to involve creating a fund that can, if necessary, lend Italy (and Spain, which is also under threat) enough money that it doesn’t need to borrow at those high rates. Such a fund probably wouldn’t have to be used, since its mere existence should put an end to the cycle of fear. But the potential for really large-scale lending, certainly more than a trillion euros’ worth, has to be there.

And here’s the problem: All the various proposals for creating such a fund ultimately require backing from major European governments, whose promises to investors must be credible for the plan to work. Yet Italy is one of those major governments; it can’t achieve a rescue by lending money to itself. And France, the euro area’s second-biggest economy, has been looking shaky lately, raising fears that creation of a large rescue fund, by in effect adding to French debt, could simply have the effect of adding France to the list of crisis countries. There’s a hole in the bucket, dear Liza, dear Liza.

[...]

The bitter truth is that it’s looking more and more as if the euro system is doomed. And the even more bitter truth is that given the way that system has been performing, Europe might be better off if it collapses sooner rather than later.

Δημήτρης Γαλάνης, Τοπία 6, Toy Cafe

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SUSAN GEORGE
A Coup in the European Union?

By a close vote on 28 September 2011, the European Parliament passed the Commission’s plan—a far-reaching takeover of individual countries’ capacity to set their own budgets and to manage their own sovereign debts. From now on, the Parliament and the Council (with the Commission naturally overseeing the process) will be able to force governments to comply with the Maastricht Treaty recommendations—otherwise known as the “Stability and Growth Pact”–to which member States had recently paid precious little attention. After 2005 this Pact seemed almost a quaint relic. But now, thanks to the six-pack, no deficits greater than 3% and no national debts above 60% of GDP will be countenanced. What these people need is stern discipline, make no mistake.

Starting in 2012, Euro-parliamentarians and the Council will dissect national budgets before national parliaments have any say at all or even a chance to look at them. If countries do not reduce their debts fast enough or refuse the budgetary “suggestions” from Brussels, enforcement measures will kick in. In case of further recalcitrance on the part of member States, punishment can mean either depositing or forfeiting .01, .02 or even .05% of the country’s GDP to the EU, depending on how severe the country’s non-compliance is judged. In the case of, say, France, with a GDP of about €1.900 billion ($2.600 billion) the Commission could demand a deposit or a fine of some €20 to €40 billion or even €100 billion if the Commission were to escalate the sanctions to .05% of GDP.